Today the New York Times continues their streak of decent economic reporting, this time exposing Congressional efforts to keep market forces out of Medicare. From the NYT:

For years, Congress has set the price for walkers and various medical equipment, and it has consistently set them well above the market rate, effectively handing out a few hundred million dollars of corporate welfare every year to the equipment makers.

But as of July 1, this system is set to change. Companies will instead have to submit bids — to compete with one another, just as Wal-Mart competes with Target — if they want to continue selling products to Medicare. Based on a pilot program, the price of walkers, delivery and setup included, will fall to about $80. Now, would you like to guess how the equipment makers feel about this? Right.

With the changeover looming, they have increasedtheircontributions to Congress. They have also started publicly claiming that competitive bidding will, among other things, deprive some patients of oxygen equipment they need.

The industry seems to be having some success, too. On Tuesday, the House overwhelmingly passed a sprawling Medicare bill that would throw out the initial bidding results. Pete Stark and John Dingell, two Democratic committee chairmen, and John Boehner, the House Republican leader, all pushed for the provision. The Senate will soon take up a similar bill.

The Times then follows up with an editorial suggesting that Congressional fealty to politically set fee schedules calls into question government’s ability to control medical costs:

This backtracking inevitably makes one wonder if major reform will ever be possible in a medical marketplace dominated by imperfect government bureaucracies and private lobbyists bent on resisting governmental reforms.